In just a few days, chip-giant Intel (NASDAQ:INTC) is set to report its third-quarter financial results and offer up financial guidance for the fourth and final quarter of the year.
Ahead of Intel's earnings release, it's worth recapping what the company told investors to expect and what the analyst community is expecting. Let's dive in.
Recapping guidance and expectations
When Intel released its second-quarter financial results on July 26, it provided detailed financial guidance for the subsequent quarter, as well as for the full year.
The company told investors to expect third-quarter revenue of between $17.6 billion and $18.6 billion and operating margin of "approximately" 32.5%. On a non-GAAP basis -- which I'm using because it's what analyst consensus estimates are based on -- the company guided to earnings per share of between $1.10 and $1.20.
If Intel hits the midpoints of those ranges -- $18.1 billion and $1.15 per share, respectively -- then it would be on track to deliver 12.1% revenue growth and 13.9% earnings-per-share growth relative to what the company turned in during the third quarter of last year.
Average analyst revenue and earnings-per-share estimates for the quarter sit at $18.11 billion and $1.15 per share, respectively. Those figures are in line with the midpoints of Intel's own guidance ranges.
Over the course of 2018, Intel has actually boosted its full-year revenue and earnings-per-share outlook twice. The first revision was in April when it took the midpoint of its revenue guidance up to $67.5 billion from $65 billion and the midpoint non-GAAP earnings-per-share outlook to $3.85. The company raised those figures to $69.5 billion and $4.15, respectively, when it reported its earnings results on July 26.
As the third quarter progressed, there were persistent reports that Intel was struggling to meet the demand for its products. As a reminder, interim CEO and CFO Bob Swan said on Intel's second-quarter earnings call that while the company was "seeing demand signals and supply feasibility to deliver on our revised expectations," the company's "biggest challenge in the second half [of 2018] will be meeting additional demand, and we are working intently with our customers and our factories to be prepared so we are not constraining our customers' growth."
Those reports seemingly pressured Intel to issue a "supply update" on Sept. 28 to reassure investors that the company "[continues] to believe we will have at least the supply to meet the full-year revenue outlook we announced in July, which was $4.5 billion higher than our January expectations."
Analyst estimates for the full year vary -- as to be expected -- but the average revenue and earnings-per-share estimates come out to $69.54 billion and $4.16, respectively. In short, analysts collectively seem to think that Intel will, in effect, hit the midpoints of the revenue and earnings-per-share ranges that it issued back in July.
When Intel reports its earnings results on Oct. 25, we'll know exactly how the company performed during the third quarter and get its latest full-year guidance. I'll be back with in-depth analysis once the numbers are out.